Business confidence in Taiwan’s manufacturing, services and construction sectors improved last month, aided by easing concerns over US tariff policies and a weaker New Taiwan dollar, the Taiwan Institute of Economic Research (TIER) said yesterday.
The sentiment gauge for manufacturers rose 1.79 points to 88.88, increasing for a second consecutive month, while sentiment in the services sector climbed 1.01 points to 88.64, TIER said, citing a monthly survey.
The construction sector index advanced 2.66 points to 97.41, the Taipei-based think tank said.
Photo: CNA
“The latest data suggest broad-based resilience despite lingering external uncertainties,” TIER president Chang Chien-yi (張建一) told a news conference in Taipei. “Taiwan’s GDP growth could approach 5 percent this year with support from the government’s planned NT$10,000 [US$328.54] cash handout.”
The confidence improvement followed Washington’s decision on Aug. 7 to impose a 20 percent tariff on Taiwanese goods, while granting exemptions to companies with US investments, particularly in the artificial intelligence (AI) supply chain, Chang said.
The NT dollar’s depreciation against the greenback also helped ease trade-related pressure, he said.
Electronics and machinery firms reported improved sentiment on the back of robust demand for AI and high-performance computing, Chang said, calling the demand much stronger than expected.
However, Chang, who is a member of the central bank’s board, warned that gains from AI-driven growth are uneven.
Traditional industries remain under pressure from US tariffs, weak European demand and China’s anti-dumping measures, he said.
The steel industry turned less pessimistic, benefiting from production cuts and market support in China that drove up global steel prices, the survey showed.
In the services sector, retailers and hospitality businesses were more upbeat thanks to the summer holiday season and festival-related consumption, it showed.
Securities houses also gained confidence as higher trading volumes and stock prices lifted earnings from brokerage, proprietary trading and underwriting, it showed.
Construction sentiment also improved, even as adverse weather and reconstruction work delayed some public projects, TIER said.
Developers gained from the handover of previously postponed projects, which supported sales momentum, it said.
Public infrastructure spending, as well as AI-related factory and equipment investments would continue to underpin the sector, it said.
By contrast, the property market showed further signs of cooling, as tighter mortgage lending by banks dampened housing transactions, and prompted developers and buyers to delay new-home deliveries, it said.
While the Financial Supervisory Commission exempted first-home mortgages from loan restrictions, the central bank’s credit controls remain in place and lenders are cautious in granting new loans, it said.
With fresh supply due to enter the market, property sale volumes are expected to remain subdued and prices would trend downward in the short term, TIER added.
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